Karnataka consumers miss out on 15% subsidy on smart meters as govt depts owe Escoms Rs 8,500 crore

According to officials in the Energy Department, various state government departments owe Escoms well over Rs 8.5 crore. Bescom alone needs to get Rs 4.5 crore.

Bengaluru: Residents of Karnataka are missing out on a 15 per cent subsidy from the central government for installing smart meters due to outstanding arrears owed by government departments to the state-owned electricity supply companies (Escoms).

According to officials in the Energy Department, various state government departments owe Escoms well over Rs 8,500 crore. Bescom alone needs to get Rs 4,500 crore.

Under the Centre’s Revamped Distribution Sector Scheme (RDSS), energy consumers are eligible for a 15 per cent subsidy, up to Rs 900, for installing smart meters. However, to qualify for this subsidy, states must meet one key condition: government departments must have no outstanding arrears with electricity supply companies in the state.

While the scheme is still available despite arrears, the union government will deduct the capital from the state’s SGST, which is typically returned to the state, and allocate this deduction to Escoms.

This rule was introduced to prevent the accumulation of unpaid charges owed to Escoms, according to the Energy Department. However, the Energy Department rejected the option of allowing SGST deduction, which means Karnataka is excluded from the RDSS. Nonetheless, the state is continuing the transition to smart meters according to RDSS guidelines.

The installation of smart meters is mandatory for new and temporary connections but optional for existing consumers, who can do so in phases.

Consumers opting for smart meters must pay an upfront fee of Rs 4,998 for the meter, which has a minimum lifespan of 10 years. The Energy Department will charge Rs 75 per month for the maintenance of the smart meter, covering costs such as the SIM card, server, software and mobile app.

The total cost over 10 years will amount to Rs 13,920. Of this, Rs 4,998 must be paid upfront and the remaining Rs 9,000 will be socialised and collected from consumers overtime, according to Bescom.

If Karnataka had opted for the RDSS, consumers in Karnataka would have received a Rs 900 subsidy on the smart meter’s Rs 4,998 cost.